Part 1: Selecting a Company
Part 2: Company Background
Part 3: Overview of the Annual Report
Part 4: The Business Environment
Part 5: The Auditors
Part 6: Industry Background
Part 7: Operating ActivitiesPart 8: Analysis of Operating Activities
Part 9: Investing Activities
Part 10: Analysis of Investing Activities
Part 11: Debt Financing
Part 12: Equity Financing
Part 13: Analysis of Financing Activities
Part 14: Comparison to Industry Benchmarks
INTRODUCTIONThis project aims to develop your understanding of financial statements and their use in decision-making. You will assume the role of a financial analyst. Your task is to study a publicly-held company in order to advise investors and creditors about the company's future prospects. This project includes several assignments, each of which comprises a part of the analyst's task.
Part 1:SELECTING A COMPANY
Your first assignment is to select a company for your project. You should do a quick scan of web sites and think about these and other features:
In what industry(ies) does this company operate?
What do you already know about this industry?
Do you know anyone with whom you could speak that works for this company or in this industry?Do you have a special interest in knowing more?
Is this company or industry in the current news?
Is there much information available about this company or industry?
Does this company face interesting business or accounting issues?
• REQUIRED: The Company that you have selected, and a paragraph about why you chose that company.
[pic]Part 2: COMPANY BACKGROUND
Before you can assess the financial health and prospects of your company, you must inform yourself about its structure and business activities. This part focuses on gathering such background information, including some facts that you will need in later parts of this project.
[pic]REQUIRED: presents the following information in good form:Your company's name, postal address and (if available) internet address;
The year in which your company was founded and the state in which it is incorporated;
The company's independent (external) audit firm;
The company's primary line(s) of business;
Size of the company, accompanied by an explanation of the company characteristicsthat provide a measure of its size;
The ticker symbol for your company and the stock exchange on which its shares are listed;
Membership of the company's Board of Directors, using whatever characteristics you think are most relevant to depict the composition of the Board [briefly explain each]; and
The majority-owned subsidiaries [maximum of four, rankedby size] of your company.
Part 3: OVERVIEW OF THE ANNUAL REPORT
Locate the most recent annual report for your company, either on the WWW or in another source. Review the major sections of this report to familiarize yourself with the content of each and the role of accounting information in the report. Typically, you will find six different sections, discussedbelow.
Financial Highlights: This summary may cover 10 years or more and include some graphical presentation. These are not complete financial statements, but merely a summary of key financial information.
Company and Products: Usually, this is a lengthy section of public relations information. This is an opportunity for the company to tout its products and operations....